1.1 meeting customer needs Flashcards
What is a market ?
Any place where buyers and sellers can meet
What is the aim of marketing?
Help identify, anticipate and satisfy consumer needs and wants profitably
What is market research ?
It is a process of systematically gathering data from consumers which can be used to influence business decisions
What is a mass market ?
Aimed at broad market segments so production is on a larger scale
What is a niche market ?
Products are aimed at a subset of the larger market so production happens on a smaller scale
What are the characteristics of mass v niche?
Mass
- economies of scale
- greater affordability
- lower profut margins
Niche
- more unique
- high average costs
- lower sales volume
- higher profit margins
How can you measure the size of a market?
Sales volume
Sales value
How do you work out sales revenue ?
price x quantity sold
How do you work market share?
sales of a business / total sales in the market
What is a brand?
A name, image, logo which helps one product/service stand out from its competitors
What is the importance of branding ?
Add value
Influence business position
Communicate their offering
Charge higher prices
What is a dynamic market ?
A market subject to rapid changes
What areas do you consider when examining dynamic markets?
- Online retailing
- How markets change (demographic, tastes , competition)
- Innovation/Market growth
- Adapting to change
What is the advantages and disadvanatges of online retailing for firms and consumers?
advantages
- wider range
- longer hours to trade
- cheaper
- collect data
disadvantages
- high development costs
- competition
- lack of personal contact
- return unwanted products
- security
What is the difference between risk and uncertainty?
Risk - potential threat to business success
Uncertainty - Outcomes are difficult to predict
What are some risks ?
Technical failures
Cyber Security Staff
Loss of key staff
Currency fluctuations
What are some uncertainty?
Economy go into recession?
Energy rising prices?
Interest rates?
What is product orientation?
An approach that focuses on the characteristics of the product rather than consumer needs
What tools are needed for product orientation?
Product research
Product testing
Product Focus
What is market orientation?
Approach to marketing that focuses on the needs of consumers and uses this information to design products
What tools are needed for market orientation?
Market research
Market testing
Customer focus
Why is effective market research needed?
To reduce risk when launching new products or entering new markets
Anticipate future needs and wants of consumers
To understand consumer behaviour
To identify potential consumer demand
To identify how much consumers are prepared to pay
To identify competitors and gauge their potential strengths and weaknesses
What is primary market research ?
Process of gathering data directly from consumers in the target market using field methods such as surveys, interviews, observations
What is the advantages and disadvanatges of primark market research?
Advantages :
- focused on needs
- in depth
- up to date
Disadvantages
- sample size too small
- bias
- hire a research agency
What is secondary data ?
This involves the collection, compilation, and analysis of data that already exists eg from market reports, gov, documents
What is the advantages and disadvanatges of secondary ?
advantages
- quick
- cheap
- suitable for smaller businesses
disadvantages
- lack relevance
- not tailored
- might be expensive to purchase
How can ICT be used to support market research?
- Webistes
- Databases
- Social Networking
What is market segmentation?
The process in which a single market is divided into sub markets that has different consumer characteristics
What are the Advantages & Disadvantages of Market Segmentation
- range of segments for different customer needs
- target groups precisely
- increase loyalty
- too small of a segment
- expensice
- detailed market research
- hard to identfy different segments
What is market posititioning ?
The process a business goes through when launching a new product or service
What is market mapping?
Identify the position of a product within a market
What is the usefulness and limitations of market mapping?
Useful
- identify if market is saturated or gaps are present
- compare with rivals
- simple
Limitations
- gap may exist because not profitable to fill
- expensive
- dynamic so constantly changing
What are some sources of competitive advantage ?
Quality
Delivery times
Customer satisfaction
Ethics
Reputation
Reliability
What is product differentiation ?
An attempt by businesses to distinguish its products from those of competitors
What is adding value ?
The difference between the price that is charged to the customer and cost of inputs required to create the product or service
What are methods of adding value?
Marketing
Design
Packaging
Customer serive
Customisation
